LONDON — Kepler Cheuvreux initiated coverage of ConvaTec Group PLC on Tuesday with a Buy rating and a 286-pence price target, citing expectations of a growth recovery and improving profitability.
The broker’s outlook assumes around 7% revenue growth and a low-teens compound annual earnings-per-share increase, supported by margin expansion into the mid-20% range by the medium term. Kepler also expects stronger free-cash-flow generation as ConvaTec moves past recent operational difficulties.
ConvaTec’s shares were up 0.4% at 228.4 pence in early trading, underperforming the FTSE 250, which rose about 0.6%. The medical-products company has been working to stabilize operations following its InnovaMatrix reset, a restructuring aimed at streamlining sales and capital expenditure.
Kepler’s initiation report highlights fiscal 2027 as a key inflection point, when visibility into sales trends and capex plans is expected to improve. The broker emphasized that the focus has shifted from turnaround efforts to demonstrating repeatable execution.
The price target implies roughly 25% upside from current levels, factoring in the anticipated recovery trajectory and margin normalization.
